Accenture’s recent acquisition of Karmarama explains how advertising has emerged as one of the most important business verticals. Karmarama is one of UK’s largest creative agencies, known for memorable advertising campaigns, data-driven content and engaging mobile platforms. The BBC, Unilever, Honda, Confused.com, and Just Eat are some of Karmarama’s high profile clients.
Reasons behind the acquisition
Since the past few years, Accenture has been broadening its business base and moving into the digital and media space. Through Accenture Interactive, the company is not only building a whole new breed of creative agency, but is also gearing up to give a tough competition to brands like IBM, KPMG, Deloitte, and PwC. Karmarama, one of the pioneers of modern creativity, has an in-depth understanding of how to connect people through digital campaigns. Through this acquisition, Accenture aims to create and deliver integrated customer experiences to brands throughout the globe. Also, this acquisition is a reflection of how businesses are improvising on their marketing strategies so as to connect with the customers in a more interactive manner.
Why have creative agencies attained so much importance?
Aggressive competition along with customers’ demand for tailored solutions has forced businesses to look for innovative ways in which they can retain their client base. Creative agencies, by virtue of their laser-focused understanding about the brand and its customer base, make it easier to market products and services in an engaging manner. It also helps companies improve their brand equity by identifying, analyzing, planning, and executing innovative marketing strategies. As creative agencies boost the overall sales and goodwill of businesses, their market has been growing in the recent years. In fact, procurement analysts at Technavio, expect the creative agencies market to grow at a CAGR of 6% by 2021.
Some of the chief reasons behind the growing importance of creative agencies are:
Mobile advertising
The growth of Internet and increased use of smartphones are two important factors which have encourages the mobile advertising. Mobile phones are no longer used just to make calls and send text messages, rather now they are the medium through which B2B and B2C interaction take place. Mobile advertising thus has emerged as one of the most sought after means of marketing products and services.
High rate of social media penetration
Social media platforms like Facebook, Instagram, and Twitter are increasingly being used to catch customers’ attention and boost the brand awareness by several business houses. The advertising spend on these platforms too has grown significantly, which is another reason for high demand for creative agencies. Procurement specialists expect the global advertising spend on social media to account for 20%–23% of the total digital advertising spend. The figure explains how important social media is for businesses.
Demand from various business verticals
Creative advertising services are no longer limited to a specific industry like fashion and cosmetics alone. Rather businesses from various verticals are resorting to marketing campaigns and related creative services to broaden their customer base. Category managers expect industries such as FMCG, healthcare, and automobile to spend 15%–25% of their total revenue on marketing campaigns – further boosting the demand for creative agencies.
For an in-depth understanding of the creative agencies market:
